Thematic Briefing on Steel Decarbonization
Standards
TENTH TRIENNIAL REVIEW
Proposal from the United States
The
following submission, dated 31 May 2024, is being circulated at the
request of the delegation of the United States.
_______________
1 Background
1.1. The signatories of the Paris Climate Agreement agreed in 2015 "to
limit the temperature increase to 1.5°C above pre-industrial levels" and
to achieve this by 2050.[1]
The onus for action was put on governments to establish National Determined
Contributions (NDCs) to limit climate change impacts by establishing goals
geared towards financing, developing technology and building capacity for
resiliency against the effects of climate change.
1.2. In pursuit of achieving NDCs, several governments have proposed and
are implementing a range of policy tools to oblige carbon reductions in the
manufacturing sector. These policy tools are aimed at raw material,
intermediate product and final product manufacturers. In light of the range of
policies in this area, manufacturers have been evaluating business plans,
production methods and supply chain structures to improve efficiencies,
negotiate power purchase agreements and invest in facility upgrades – all aimed
at lowering production emissions. This has also led to increased carbon
accounting and reporting obligations throughout the supply chain.
1.3. The foundational standards for calculating and reporting production
and product emissions, such as the ISO's 14000-series standards, the Greenhouse
Gas Protocol and Environmental Product Declarations are not new, but their
original constructs are general and not sector specific. Because of that, there
are numerous standards, guidelines and initiatives that have been created to
incentivize emissions reductions in specific industries through signals of low
carbon product market demand and the supply of materials that meet certain low
carbon thresholds. This holds especially true in the steel sector.
1.4. In response to growing concerns that NDCs made in 2015 were not
robust enough to meet the 1.5°C scenario – and in parallel with emerging
private sector initiatives creating competing definitions of low carbon
production – the International Energy Agency (IEA) published Net Zero by 2050: A
Roadmap for the Global Energy Sector[2], which has become a
bellwether plan for the energy sector – and the industries that consume
electricity - to reduce carbon emissions. Within the Roadmap are staged guidelines toward
ramping up renewable energy and shifting away from the use of fossil fuels. The
Roadmap also envisions the state
of heavy industry as predominantly run on low-emissions technology by 2050.
1.5. To that end, in 2022 at the request of Germany's G7 Presidency, the
IEA published Achieving Net Zero Heavy
Industry Sectors in G7 Members[3],
which prescribes policies and financing mechanisms to facilitate heavy industry's
low carbon transition, as well as offers a definition for near zero steel and
cement. The report acknowledges that transition efforts solely in the G7 will
not reverse climate change but offers suggestions for global leadership in this
endeavour. This was followed in 2023 with the report, Emissions Measurement and Data Collection for a Net
Zero Steel Industry, that offers solutions for developing and
implementing steel emissions calculation methodologies and frameworks in G7
countries.[4]
1.6. Yet, the proliferation of initiatives, standards and guidelines to impel
the steel industry towards a low carbon future continues. While there are no
TBT notifications on steel decarbonization specifically, there are some related
to steel scrap and circular economy (_G/TBT/N/EU/953)[5],
some about steel as waste (_G/TBT/N/CHN/1227)[6],
and others about regulating pollutants from steel production generally (_G/TBT/N/USA/2026).[7]
At COP28 in 2023, DG Ngozi Okonjo-Iweala presided over the launch of the Steel Standards Principles.[8]
The initiative was launched with more than 35 signatories (now standing at
more than 45) to drive collaboration and alignment among the various approaches
to incentivizing lower carbon steel production, building on the International
Energy Agency's "Net Zero Principles" for Emissions Measurement and
Data Collection for a Net Zero Steel Industry as well as the WTO's Technical
Barriers to Trade (TBT) Agreement Code of Good Practice and the WTO TBT
Committee's Six Principles for the Development of International Standards,
Guides and Recommendations." Signatories include international
organizations, trade associations, individual steel producers and civil
society, and they committed to meet in 2024 to establish a workplan toward
meeting the agreement's objectives.
2 Proposal
2.1. The United States proposes to hold a thematic session that would
explore the landscape of standards and methodologies for measuring greenhouse
gas emissions in the steel sector and the steel industry, including
organizations that have signed onto the Steel
Standards Principles.[9]
The intent is to (1) increase awareness of the impetus for the development of
these various approaches to measuring greenhouse gas emissions in the steel
sector; (2) learn about similarities and differences among the different
approaches; and (3) increase the understanding of the connection of these
initiatives to the global trading system, generally, and the various
instruments of the WTO, specifically the TBT Agreement and the Six Principles.
2.2. Topics could include:
a._